(7 June 2017 – Singapore) Singapore's banking regulator has told lenders it will delay by a year the implementation of global rules designed to rein in trading risks.
The announcement follows similar postponements by regulators in neighbouring Hong Kong and Australia, driven by uncertainty over complexity of the rules and how they will mesh with other capital reforms.
The Monetary Authority of Singapore (MAS) notified local banks of the delay to the so-called “fundamental review of the trading book (FRTB)” in a letter last month that also flagged a number of other regulatory issues reports say.
A spokesperson for the regulator said, “In determining the implementation timeline, MAS will consider factors such as the state of global implementation guidance, the industry's readiness and implementation progress in other jurisdictions,” it said in a statement.
Basel has no powers of enforcement and relies on member countries to commit to the implementation of reforms agreed by the committee. A person familiar with the committee's workings said there was no sign of the FRTB being ditched outright.
In addition, capital for trading books is a small proportion of a bank's total buffer and therefore, a delay in the FRTB does not materially affect the bigger capital picture for the banking sector.